MARINE CORPS BASE CAMP PENDLETON, Calif. -- Taxpayers can expect a welcome bonus come July 25 when the IRS begins issuing advance-payment checks for the 2003 increase in the Child Tax Credit to about 25 million people across the United States, including many Marines and sailors here who claimed children on their 2002 tax return.

Moreover, one-fifth of active-duty military members with families who aren't eligible for the rebate may soon become eligible as a result of legislation passed  June 12 by the House of Representatives. Those members, who earn less than $27,000 per year and pay little or no federal tax, wouldn't get a check this year but would be able to apply the credit to next year's tax return, if the House and Senate can work out differences in competing legislation and get a signature from the president.

Meanwhile, other eligible taxpayers won't have to do anything to receive up to $400 per qualifying child.  The Treasury Department and the IRS will automatically mail a notice and a check to each eligible taxpayer and perform all of the calculations.

According to Mark W. Everson, the IRS commissioner, qualified taxpayers need not call, apply or fill out a form.  The IRS does all of the work - and will send out checks shortly after sending notice. 
The checks are an advance payment of the 2003 increase in the Child Tax Credit.  They will be based on the credit claimed on the taxpayer's 2002 tax return. The maximum child tax credit for 2003 was increased to $1,000 per child, up from $600 in 2002, by virtue of the Jobs and Growth Tax Relief Reconciliation Act of 2003. The law instructs the Treasury Department to pay the difference, up to $400 per child, as an advance payment to all eligible taxpayers this summer, according to an IRS news release.

July 25, Aug. 1 and Aug. 8 are the three principal mailing dates. The order in which the mailings will be sent out will be based on the last two digits of the Social Security number that appears on the 2002 federal tax form. Those with the numbers 00-33 will be mailed on July 25, numbers 34-66 will be mailed on Aug. 1, and numbers 67-99 will be mailed on Aug. 8. 

Taxpayers who filed returns later than April 15 are still eligible and will receive their advance payments after the IRS processes their returns. Mail-outs will continue through December. Taxpayers are urged to hold on to the notices for their 2003 tax returns. They'll need to take into account the advance payment when determining the amount of their child tax credit on their 2003 tax returns.

Eligible taxpayers who do not receive an advance-payment check will be entitled to up to an additional $400 per qualifying child if they claimed the Child Tax Credit on their 2003 tax return.

Previously, low-income tax payers were not eligible for the tax-credit increase. But the Senate pushed the agenda two weeks ago by passing legislation to include them. The Senate version included a payout this year to those taxpayers. But the House bill stopped short of the immediate payout. A conference committee of House and Senate members is now trying to hammer out a compromise, according to the New York Times.

For more information, visit the Volunteer Income Tax Assistance Center, Building 1687, Mondays through Thursdays from 8 a.m. to 4 p.m. and Fridays from 8 a.m. to 11 a.m., or call at 763-2518.